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Shanghai's high-tech flop

Posted by: Bruce Einhorn on August 03, 2007

Foreign visitors to Shanghai marvel at the high-tech link between the airport and the city, a super-fast train without wheels that floats over the track thanks to magnetic levitation. The maglev, built by Chinese a few years ago with the help of Siemens, is the only one of its kind anywhere in the world and is one of the projects that China boosters point to as a sign that the country is now world class. No doubt the maglev is speedy. At its fastest, the maglev reaches over 400 km per hour and makes other high-speed trains like Japan’s Shinkansen and France’s TGV seem like tortoises. And it’s fun to ride. Each car of the maglev has a digital speedometer showing you just how fast the train is going. When the maglev is accelerating in the first half of its journey from the airport, that speedometer is almost hypnotic; I find that it’s hard not to watch, fascinated, as the numbers keep going higher and higher and higher.

So the maglev is certainly cool. Problem is, it’s also a major flop. As this Bloomberg story points out, the number of riders since the maglev opened in 2002 has been far less than what its builders – Transrapid, a JV between Siemens and ThyssenKrupp - had predicted. Reports Bloomberg: “The train carried 11 million passengers from December 2002 to the end of May this year….Transrapid predicted at least 10 million a year.” The train is too expensive for most Chinese and even though it travels 30 kilometers from the Pudong airport it still stops, if not in the middle of nowhere, on the outskirts. You get off and you then have to find some way to get downtown.

I’ve taken a lot of flack from readers in India for asking why the Chinese do such a better job building infrastructure than the Indians. I still think that’s a valid question, and the shabby state of Indian roads and airports and trains definitely hurts the country’s competitiveness. But as the Shanghai maglev example shows, the Chinese model has serious flaws, too. Would a democratically elected government, one that had to deal with a media free to alert citizens of its mistakes, have made the decision to waste billions of taxpayer dollars on such a train?

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Reader Comments


August 3, 2007 05:59 AM

The answer to your question at the end is YES

Ever heard of the Big Dig?

or the Iraq War? GWB was elected and we had free media.. so freaking what?


August 3, 2007 10:21 AM

I don't follow this maglev thing closely, but from what I know, there is another aspect to it.

China wants to build a high-speed railway system, but she doesn't know which is the best suitable technology to use. The Shanghai maglev is partly built for commercial use and partly built to test the German technology. To be cautious, Chinese government has been using a trial-first-adoption-later technique to implement any major policies.

High-speed railway network is under construction or in plan in different areas in China. I am not sure how much China learnt from Shanghai maglev.


August 4, 2007 08:51 AM

The very original prime purpose of the maglev in Shanghai was to find out if it was financially practical to operate such a train, also to test out the technology that had never been commercially tried. That was also why it was 30 km, not 3000 km. So, the "waste" question you raised at the end of article is not a valid one at all.


August 4, 2007 07:39 PM

Bruce - I believe you are mistaken, the flak you maybe getting is not for asking why the roads ... in India is so bad ,but the constant comparison you seem to be making with China. Lot of people are asking the same questions about infrastructure issues in India and even govt seemed to have finally realized that. But comparing India to China in all cases is like comparing apples to well...idiotic. In fact you yourselves have raised a question .."would a democratic elected government (do this).."
For a change if it is in your perverse pleasure to continue this ..give us a break and compare India with someone else for a change!

Robin Aggarwal

August 5, 2007 12:41 PM

I an from India and the biggest difference between Chinese model and India model is that in China infrastructure building is done with pro-active approach where as India has no approach at all.


August 6, 2007 02:41 AM

Maybe the local government should learn lesson and take full things into consideration before spending money.

Maybe it is a good way for China to decrease it's trade surplus with Europe,like large purchase of plane from Europe and USA. So besides these things, China need more choice and USA and Europe would better impose less limitation on it's export to China.

Paul Ross

August 6, 2007 03:32 AM

One other fundamental reason the train has not lived up to expectations were the limited hours of operation. Until quite recently it closed in the late afternoon. Not convenient for business people coming into Pudong on evening flights.


August 6, 2007 09:11 AM

The chinese wanted to copy the maglev trains. That's why they built the Shangahi track. Now they are building a cheap copy of the maglev train, and they will use it in their high-speed network. Poor Germans, they were so proud to show their achievement. Now they know the consequences of doing businees with an authoritarian regime.


August 6, 2007 10:45 AM

One missing statement: Siemens basically funded the entire project as 'proof of concept' and to entice China into extending it to a real commercial venture.

I totally agree the way it's currently set up, 'cool' but total waste. I also understand it is being extended....

Shanghai People

August 6, 2007 12:12 PM

The project is just a simple window dressing for
Chinese government to prove how advanced China is.

As Mr. Einhor says "a sign that the country is now world class."

While on reality, the system cannot survive on its
own without government support.

In addition, Chinese government took advantage of
deal-hungry western companies to provide so-call
technical cooperation while Chinese engineers
work hard to steal trade secrets from Siemens and ThyssenKrupp.

Several months ago, Chinese government announced a
new high-speed train will be built using "Chinese
technology" Gernman Government is investigating
if Chinese steal Siemens technology.

The morale of this lesson is that western companies usually grossly over-estimate the strength and the size of Chinese consumers.
Just look at the oringial estimate 10 million a year passangers while the real number of passagners since the railroad finished is only 11

Those companies do whatever to enter Chinese market dreaming big profit while Chinese learn
their technology and set up its own shop to
against them.

Just look at auto industry. The same situation
is repeating itself


August 7, 2007 02:04 AM

It's only a couple of billions, no big deal, even it is a commercial failure, so what:) It's really a bargain, as a tuition. 30Km Maglev as a waste at least prevented further much bigger waste on a 3000Km Shangai-Beijing Maglev Link.

Katie Leung

August 7, 2007 08:09 AM

Maybe , people here may find this interesting

"Earlier this year, when the Chinese media revealed that China had begun to develop its own maglev train technology, the German media was quick to accuse China of plagiarism. The "Financial Times Deutschland" said that "maglev technology is the pride of German engineering as well as a symbol of innovation. Chinese people buy foreign technology only to counterfeit it." Bavaria's State Premier, Edmund Stoiber, responded even more harshly, saying that "what happened in China smells like technical theft". Even after the German government intervened to clarify the issue, the public was not entirely convinced. Germany began to feel uneasy at this time."

"Nowadays, there are three types of magnetic levitation technology in the world, namely, superconducting electromagnetic levitation, normal-conducting electromagnetic levitation and permanent magnetic levitation. The first one is developed and possessed by Japan. The second is developed and owned by Germany. The third is independently developed by the Dalian permanent magnetic levitation project team, and is an innovation completely controlled by China. It is an entirely new technology."

Katie Leung

August 8, 2007 05:36 AM

"German national television said people should be aware of two issues following the accident. Firstly, Germany must admit that Chinese people have their own technology. Chinese experts have spent 20 years tackling these technological challenges; "the Chinese have been studying maglev technology carefully so that they will be able to compete in five years." Secondly, they need to concede that the German technology is not as "miraculous" as was believed. Germany certainly has room for improvement. "

"The Dalian permanent magnetic levitation project team started to do research on permanent magnetic levitation in 1998. From 1998 to 2006, the project team made a number of breakthroughs and devised many innovative techniques. On August 7th 2003, a magnetically levitated vehicle made by the team for conveying park visitors was successful in the operation test, indicating that China has its own magnetic levitation technology. After that, the project team succeeded in solving 5 major technical issues. On December 26th 2004, they made a permanent maglev train that made satisfactory performances on a 70-meter long track during operation test.

Magnetic engine is the core technique of a maglev train. The magnetic engine inside a permanent maglev train is a decentralized power device developed by China on its own. This type of engine can help to cut costs dramatically and can reduce energy consumption by about 50 percent. The Dalian project team has managed to develop two types of magnetic engines, one with traction of 105 newtons and the other with traction of 15,000 newtons. The former, with a rated velocity of 140 kilometers per hour and a maximum velocity of 218 kilometers per hour, aims to be used in low-speed permanent maglev train. The latter, with a rated velocity of 268 kilometers per hour and a maxim velocity of 536 kilometers per hour, can be adopted in medium-speed passenger or cargo permanent maglev train....."


August 18, 2007 06:25 PM

Well, not all projects in China are successful :-)
Someone earlier in this trail commented that one of the flaws of the train are not its technology but how it is operated. Lets face it, the train is very convenient -- I have used it a number of times. However, if it does not operate all the time planes arrive it is a waste of an investment....So, my vote is, it is a good idea, just needs to be extended to downtown Shanghai and its hours of operation extended as well

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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